Travel, Tourism & Hospitality

Turkish Air taps global e-commerce market with new JV

Turkish Airlines, Chinese cargo giant ZTO Express and Hong Kong-based PAL Air Limited have inked a MoU to form a Joint Venture company to operate as a global express/courier company mainly focusing on global e-commerce market with full door to door services.

The partnership is not only a big strategic step for Turkey prior to the opening of the Istanbul New Airport but a game changer for the global express transport business.

The agreement was signed in Istanbul by Milker Ayc, chairman of the Board and the Executive Committee, Turkish Airlines; Mei Song Lai, chairman, ZTO Express and Vivian Lau, vice-chairman, PAL Air.

“Today, I feel privileged to welcome you all for the signing ceremony of a great partnership agreement between the biggest brands of China and Turkey. We are now delighted to make this strategic move into global express business together with the strong partnership of ZTO, the best and largest Express company from China and our long-term cross-border forwarding partner PAL Air Ltd. from Hong Kong. The Joint Venture, after reaching quickly to fully functional and operational levels, is expected to take place within the world’s largest integrators. In five years’ time, it will generate over $2 billion of revenue. The growth is expected to continue gradually parallel to the e-commerce demand.

The new JV Company which will be based in Hong Kong will provide all door to door logistics activities; trucking, collection & distribution, freight transportation, cross docking and final mile delivery. It will also include warehouse management, order and supply chain management when necessary.

The Istanbul New Airport will be opened by October 29 this year and it will function as Turkish Airlines' main operating hub. This mega hub will gradually provide Turkish Cargo up to 4 million tons of cargo handling capacity, becoming one of the top five air cargo brands of the world. The flow of e-commerce products globally with this Joint Venture and via Istanbul Mega Hub will provide maximum value to our customers worldwide,” said Aycı.

The cooperation between the three partners will form synergy by combining strong core competencies and integrating key resources, and will undoubtfully effect positive progress in the areas of global express delivery, warehousing, cargo freight, and aviation route development and more, and will ultimately benefit traders and consumers globally.”

Along with booming e-commerce volumes, the global express/courier industry continues to show outstanding growth rates. In 2016, this industry had around $260 billion in revenue realisation and it is now expected to reach $340 billion in 2020 and to more than $400 billion in 2023. With this partnership, all sides are all engaged to increase their capability and exposure significantly. - TradeArabia News Service